Republicans in federal office are eying cuts to Medicaid, a move that could have deep reverberations for the Maryland budget and for Marylanders themselves.
Congress is considering a plan that would cut $880 billion in Medicaid; the details on what exactly would be cut are still in the air, but one option is to get rid of the Medicaid expansion, a key provision of the Affordable Care Act.
That extension allows people who make up to 138% of the poverty level eligible for Medicaid.
“The federal government pays 90% and the states pay 10%,” said Liz Williams is a senior policy manager at KFF, a nonprofit that focuses on health strategy. “One of the proposals on the table is to lower that enhanced federal match rate for the expansion population down to the standard match rate and that means that would shift substantial costs to states.”
Estimates show that cuts like that would put $16 billion of unexpected costs onto Maryland over the next ten years, according to KFF.
That’s a significant problem for a state that just shored up a $3.3 billion deficit, and may be facing a $6 billion deficit next year.
In addition, more than 420,000 Marylanders would lose Medicaid insurance.
“If people wind up getting kicked off of Medicaid, that could mean potentially hundreds of thousands of people were unable to go to the doctor, unable to treat chronic illnesses,” said Christopher Myer is a research analyst at the Maryland Center on Economic Policy. “It'll also have a broader impact on our economy. Federal dollars that flow through the state budget then wind up going into families pockets, and then they cycle that back into the economy by spending it on local businesses. That would actually reduce sales at local businesses and have a ripple impact of actually reducing state GDP.”
State lawmakers are trying to preempt federal cuts with trigger laws built into the state budget in hopes of keeping the deficit from ballooning as federal funding becomes more ambiguous.
This year’s budget has a trigger built into it that could bring back lawmakers for a special session if the state loses $1 billion in total federal funding.
“We want to be prepared with the Trump triggers, but we don't want to prejudge what's going to happen, because we don't know how much of it's going to be in education, how much is going to be in health care, how much is going to be in agriculture, how it's going to be in public safety,” said Maryland Sen. Jim Rosapepe, the vice chair of the Budget and Taxation Committee. “The federal government supports states across a huge range of activities now some are bigger than others.”
Lawmakers are also looking for ways to give Marylanders who may lose Medicaid time to find new insurance if the state is unable to find a way to make up the deficit.
Meanwhile, healthcare advocates say cutting the number of people who are insured not only harms people on Medicaid, but everyone buying into health insurance.
“We did a study showing that going from 13% to 6% uninsured, much of it through Medicaid, reduced uncompensated care by $460 million,” said Vincent DeMarco, the president of Maryland Healthcare for All! “That's $460 million that would have increased our premiums, health insurance premiums. So if we cut Medicaid, we all are hurt.”
